Energy Prices
Posted: Mon Sep 05, 2022 7:30 am
Hi All
I am curious to know anyones thoughts about the energy prices and put some information out there as well.
As you know, Ofgem did approve the energy price hike which is about an 80% price hike which kicks in October 1st. Contrary to what politicians and the news are saying about it, this didn't start with Russia/Ukraine, but around June/July last year and has only gotten worse. Also, only 3% of our natural gas comes from Russia, so this also doesn't really tally up.
According to the ONS, our gas consumption has actually gone down since 2010 to 857,000 Gwh in 2021 (from 1,082,229). Interestingly, from these statistics, it does say that the production peaked in 2000 and has steadily decreased since, but the population has increased by 6.3%, so I am wondering if this is the real reason behind the price increases. Possibly, but I found something which dirties the water a bit more
So why the drop off in gas/oil production - well.....https://assets.publishing.service.gov.u ... e_2022.pdf)
In this doc, it states a few things which are worrying, but there was something which stuck out for me - Energy production fell on the same period last year, mainly due to primary oil production which has not fully recovered following summer 2021 maintenance on the UK’s Continental Shelf
What's this? It looks like the UK decided that it is going to start decommissioning Oil and Gas Installations and pipelines in accordance to OSPAR. OSPAR are 15 countries committed to protecting marine life in the North-East Atlantic. This was in the UKs own guidance notes - The Guidance Notes are largely unchanged from the 2009 version with the founding principles enshrined in the UKs commitment to OSPAR Decision 98/3 and its requirement that all installations should be completely removed unless a derogation is granted.
To sum up - in OSPAR, in 1998 agreed to dismantle these installations and the UK began dismantling their own installations in 2021. (https://www.ospar.org/news/scm-21). The kicker in the UK guidance notes about this is the following - 'The powers set out in section 29 of the 1998 Act aim is to ensure that those who have benefitted from the exploitation or production of hydrocarbons bear the responsibility for decommissioning. In this way the taxpayer is protected from having to fund decommissioning.' The date of the OSPAR meeting was November 2021.
My thinking about this is that scarcity brings prices up and also providers almost never eat expenses which are government directives - they are almost always passed to the consumer, so that is what is likely happening in the UK - a combination of eating costs for dismantling the existing infrastructure and energy scarcity as well as these companies needing to turn a profit for their shareholders.
But is much much easier to say - because Putin because it gives cover to ridiculous policies. Let's dismantle sources of energy without adequate replacements.
The question is why they are doing this? I haven't read all of the documents in full, but if I were to hazard a guess, I would say that it is Net Zero which is the source. This is the thought that humans create climate change which is another point of contention.
This is getting long now, so I will close for now
I am curious to know anyones thoughts about the energy prices and put some information out there as well.
As you know, Ofgem did approve the energy price hike which is about an 80% price hike which kicks in October 1st. Contrary to what politicians and the news are saying about it, this didn't start with Russia/Ukraine, but around June/July last year and has only gotten worse. Also, only 3% of our natural gas comes from Russia, so this also doesn't really tally up.
According to the ONS, our gas consumption has actually gone down since 2010 to 857,000 Gwh in 2021 (from 1,082,229). Interestingly, from these statistics, it does say that the production peaked in 2000 and has steadily decreased since, but the population has increased by 6.3%, so I am wondering if this is the real reason behind the price increases. Possibly, but I found something which dirties the water a bit more
So why the drop off in gas/oil production - well.....https://assets.publishing.service.gov.u ... e_2022.pdf)
In this doc, it states a few things which are worrying, but there was something which stuck out for me - Energy production fell on the same period last year, mainly due to primary oil production which has not fully recovered following summer 2021 maintenance on the UK’s Continental Shelf
What's this? It looks like the UK decided that it is going to start decommissioning Oil and Gas Installations and pipelines in accordance to OSPAR. OSPAR are 15 countries committed to protecting marine life in the North-East Atlantic. This was in the UKs own guidance notes - The Guidance Notes are largely unchanged from the 2009 version with the founding principles enshrined in the UKs commitment to OSPAR Decision 98/3 and its requirement that all installations should be completely removed unless a derogation is granted.
To sum up - in OSPAR, in 1998 agreed to dismantle these installations and the UK began dismantling their own installations in 2021. (https://www.ospar.org/news/scm-21). The kicker in the UK guidance notes about this is the following - 'The powers set out in section 29 of the 1998 Act aim is to ensure that those who have benefitted from the exploitation or production of hydrocarbons bear the responsibility for decommissioning. In this way the taxpayer is protected from having to fund decommissioning.' The date of the OSPAR meeting was November 2021.
My thinking about this is that scarcity brings prices up and also providers almost never eat expenses which are government directives - they are almost always passed to the consumer, so that is what is likely happening in the UK - a combination of eating costs for dismantling the existing infrastructure and energy scarcity as well as these companies needing to turn a profit for their shareholders.
But is much much easier to say - because Putin because it gives cover to ridiculous policies. Let's dismantle sources of energy without adequate replacements.
The question is why they are doing this? I haven't read all of the documents in full, but if I were to hazard a guess, I would say that it is Net Zero which is the source. This is the thought that humans create climate change which is another point of contention.
This is getting long now, so I will close for now